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Private sector lender Kotak Mahindra Bank reported a 50 per cent year-on-year (YoY) jump in consolidated net profit in the Q4FY22. Net profit totalled Rs 3,892 crore in Q4FY22 versus Rs 2,589 crore in the same period last year. On a full year basis (FY22), the consolidated net profit was up 21 per cent at Rs 12,089 crore, over the previous year.
On a standalone basis, which represents the banking operations, the lender’s net profit was up 65 per cent YoY at Rs 2,767 crore in Q4FY22, beating Street estimates, as it wrote back Covid-19 provisions amounting to Rs 453 crore in the quarter. Analysts polled by Bloomberg had estimated a net profit of Rs 2,147 crore for the bank. In the year-ago period, the lender earned a net profit of Rs 1,682 crore.
Net interest income (NII), the difference between interest earned and expended, of the lender increased 18 per cent YoY to Rs 4,521 crore, aided by a loan growth of 21 per cent. The net interest margin, a measure of profitability of the lender, stood at 4.78 per cent in Q4FY22.
Fees and services income was up 23 per cent YoY to Rs 1,697 crore in Q4FY22.
The bank wrote back Covid-19 provisions to the tune of Rs 453 crore in Q4FY22, and Rs 732 crore for the full year (FY22). The bank had reversed Rs 279 crore Covid-19 provisions in the December 2021 quarter. However, it still continues to hold provision of Rs 547 crore as at 31 March, 2022 against the potential impact of Covid-19.
In the year ago quarter, the lender had made total provisions of Rs 734 crore; the December 2021 quarter had seen total provision write-back of Rs 131 crore including Rs 279 crore relating to Covid.
Asset quality of the lender improved, with gross non-performing assets (NPAs) dropping 37 basis points sequentially to 2.34 per cent. Net NPAs dropped 15 basis points to 0.64 per cent during the same period. Slippages, or loans turning bad, for the quarter were Rs 736 crore, while loan recoveries and upgrades were Rs 897 crore.
Loan book of the bank grew 21 per cent YoY to Rs 2.71 trillion, driven by growth in the home loan, consumer banking, credit card, and micro finance segments. Corporate banking segment grew 6 per cent YoY but de-grew sequentially. The SME segment, however, grew 25 per cent YoY and 10 per cent sequentially.
Deposits of the lender grew 11 per cent YoY to Rs 3.11 trillion, with CASA (current account and saving account) ratio as at March 31, 2022 at 60.7 per cent.
Capital adequacy ratio of the bank stood at 22.7 per cent, with Tier I ratio at 21.7 per cent. The board of directors of the bank have recommended a dividend of Rs 1.10 per equity share having face value of Rs 5, for the year ended March 31, 2022, subject to approval of shareholders.
Entities controlled by the Kotak family have a significant shareholding in Business Standard.
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